Dubai World, the indebted conglomerate at the heart of the sheikdom’s credit problems, may sell off assets it acquired during a multiyear building and buying spree to raise cash, a senior government official said.
Dubai Finance Department Director-General Abdul Rahman al-Saleh did not say which pieces of the company were for sale in an interview posted on al-Jazeera’s Web site yesterday. However, he emphasized that the assets in question would be the company’s, and not those held by the government of Dubai.
The finance chief said the primary aim of restructuring the state-backed company was to ensure it remains viable for years to come.
“It is premature to announce any plans now, but the main goal is that Dubai World will continue in the future as a company with a new framework to face challenges,” al-Saleh said.
He did not elaborate.
The sale of any major Dubai World assets would mark a shift for the conglomerate, which repeatedly downplayed questions it would need to unload pieces of its global empire even as Dubai’s financial concerns grew more acute over the past year.
That perception began to shift last week, when the company said tersely that its restructuring would include an assessment of options to reduce its debt load, “including asset sales.”
Al-Saleh’s latest comments were the clearest sign so far that Dubai’s leadership is growing more comfortable with the idea of selling off pieces of the company.
Over the past years, Dubai World relied heavily on borrowed money to carve out markets far beyond the tiny emirate’s shores.
Its slogan boasts: “The sun never sets on Dubai World.”
The company runs the world’s fourth-biggest seaport operator, DP World, with operations on six continents. Its wide-ranging investment portfolio includes luxury retailer Barney’s New York, a stable of high-end US hotels and stakes in Las Vegas casino operator MGM Mirage and Cirque du Soleil.
At home in Dubai, the company’s property arm Nakheel built man-made islands in the shape of palm trees and a map of the world.
The iconic British cruise liner Queen Elizabeth 2 sits in a downtown Dubai port awaiting renovations to turn it into a floating hotel.
Many lenders at home and abroad lent Dubai World money on the assumption that, as a company controlled by the government, it had implicit state backing.
Al-Saleh, however, reiterated the Dubai government’s position that there was no state guarantee in Dubai World.
The company has US$60 billion of outstanding debts. Late last month, it surprised markets by requesting a delay in paying billions of dollars of debt coming due this month.
“Banks believed the Dubai government ... would not want to risk its reputation, but [the] government effectively called their bluff” when it asked for new repayment terms, said Jan Randolph, director of sovereign risk at IHS Global Insight.
NO VIRUS BLUES: A SEMI Taiwan official said that the virus does not slow down the global semiconductor industry’s investment in manufacturing equipment The production value of the nation’s semiconductor industry is expected to grow 16.7 percent this year from last year, outpacing the global industry’s 3.3 percent growth, industry association SEMI said yesterday. That would help Taiwan safeguard its second spot in the global semiconductor market with a production value of more than NT$3 trillion (US$102.73 billion), SEMI Taiwan president Terry Tsao (曹世綸) told a media briefing in Taipei for the Semicon Taiwan trade show beginning today. The global semiconductor industry’s production value is expected to increase to US$426 billion this year, SEMI said. In terms of semiconductor equipment investment, equipment billings from Taiwanese firms
Intel Corp has received licenses from US authorities to continue supplying certain products to Huawei Technologies Co (華為), a company spokesman said yesterday. Washington has been pushing governments around to world to squeeze out Huawei, saying that the telecom giant would hand data to Beijing for espionage. From Monday last week, new curbs have barred US companies from supplying or servicing Huawei. This week, the state-backed China Securities Journal reported that Intel had received permission to supply Huawei. China’s Semiconductor Manufacturing International Corp (SMIC, 中芯國際), which uses US-origin equipment to make chips for Huawei and other companies, last week confirmed that it had sought
Taipei Times: When do you think the hospitality industry can return to how it was before the COVID-19 pandemic? How does Formosa International Hotels Group (FIH, 晶華酒店集團) fare this quarter and beyond? FIH chairman Steve Pan (潘思亮): The virus outbreak will have a serious impact on business travel, driven mainly by meetings, incentive travel, conferences and exhibitions over the past three decades. For the past six months, many businesspeople have grown used to exchanging information on the Internet, where more people can participate. The trend might sustain for three to five years until people are vaccinated and it is safe to
DIGITAL COMMERCE: In 2016, only 2 percent of orders were delivered in Taiwan, but that has risen to 10 percent, Foodpanda Taiwan Co operations director Nick Yu said Online food delivery platforms have seen explosive growth in Taiwan this year, helped by business opportunities related to the COVID-19 pandemic, company executives said at a digital commerce conference in Taipei yesterday. When the threat of COVID-19 kept people from going out to eat, more people experimented with ordering food deliveries online, Foodpanda Taiwan Co Ltd (富胖達) operations director Nick Yu (余岳勳) said. Foodpanda started operations in Taiwan in 2012. “We experienced 5,000 percent growth in the past 24 months,” Yu said. “That’s more than the previous six years combined.” In 2016, only 2 percent of food orders were delivered in Taiwan, but that